AAPL Stock: Could This Be Apple’s Next Revolutionary Product?

By Gaurav S. Iyer, IFC Published : January 4, 2016

Another Huge Year for AAPL Stock?

There is a ton of upside for Apple Inc. (NASDAQ:AAPL), as we begin another year of product releases and dividend increases. Also, I’ve noticed a common thread in rumors about Apple that suggest another massive spike in AAPL stock.

The legacy of Steve Jobs was one of innovation. Under the tenure of Tim Cook, it seemed like Apple may have lost that streak of entrepreneurship. Don’t get me wrong; I completely understand why Jobs chose Cook as his successor.

As Apple’s ex-chief operating officer, Cook was the traffic cop needed to keep the company functioning smoothly. It took his extraordinary organizational skills to keep Apple from losing focus, as it became the most valuable company on the planet.

But now it seems like the company is getting ready for another leap forward in consumer technology. Yes, I’m talking about eliminating traditional earphones.

Will the iPhone 7 Have a Headphone Jack?

The rumor mill has been buzzing about Apple’s supposed decision to remove the 3.5 mm headphone jack from its “iPhone 7” (soon to be released). We can’t know for sure until the company unveils its design, but the story hasn’t been explicitly refuted. (Source: “Will Apple drop the headphone jack on iPhone 7?” Mashable, November 30, 2015.)

To most people, removing the headphone jack is absolute lunacy. Why on Earth would someone buy an iPhone instead of an “Android”-powered phone if they also have to buy specialized earphones?

The outrage at this rumor was pretty consistent across the board. And that gave me pause.

Apple is famous for giving us what we never knew we wanted. The company looks to deliver customer satisfaction in both aesthetics and functionality, meaning its designers have their finger squarely on the pulse. They know removing headphone jacks is an unpopular idea. They would only do it if the change provided better sound quality and design.

If the proposal were not actually true, I would expect Tim Cook to swat away the rumors as ridiculous speculation. The fact that he didn’t is telling. From my vantage point, that looks like Apple is planning to disrupt the $8.0-billion headphone market.

Most often, wireless or USB headphones trade convenience for sound quality. Apple must have fixed that issue if they’re going to replace traditional headphones. I mean, the need for wires is pretty archaic considering how far technology has come in the last few decades, so maybe Bluetooth headphones will become the new industry standard.

This could be yet another bridge that Apple leads us across.

What’s Ahead for AAPL Stock?

Aside from the headphone jack, Apple also has a new “Apple Watch” coming out. The latest smartwatch from Apple will be slimmer and sleeker than the original, featuring a wide selection of apps, especially in the healthcare space. (Source: “Apple products: What to expect in 2016,” Yahoo! Finance, December 31, 2015.)

The “iPad Pro” is also going to benefit from more apps that could expand its usefulness to working professionals. Developers are feeling particularly motivated to continue innovating because Apple is reportedly redesigning its app store.Then there’s the promise of more stock buybacks and dividends. If those aren’t a reason to be bullish on AAPL stock, then perhaps the promise of growth is. By replacing the 3.5 mm auxiliary port with a USB-C port, Apple could not only shave a millimeter off the “iPhone 7,” but it could also launch an entirely new product line.